Calif. American Water Seeks Rate Increase

Jan 30, 2009

California American Water has filed a rate case application with the California Public Utilities Commission for 2010 and 2011. The company plans to invest $2.8 million in the Larkfield water system during that period to add additional well capacity, rehabilitate existing wells, and replace water mains. The proposed rate increase is critical to fund necessary improvements, according to a Jan. 26 press release.

If approved, residential customers will see an average increase of about 23 percent, or 61 cents per day. The filing also will offset increases in operational and maintenance costs.

"California American Water is planning strategic investments to ensure that we are able to meet the community's demand for water," said General Manager Steve Seidl. "We will also continue to focus on supporting customer conservation efforts to reduce the need for new water supplies."

The highest priority for Larkfield is to add additional well capacity to the system in order to meet water supply needs. One project that is planned is the previously approved Faught Road well. The case seeks approval for an additional well on Mark West Station Road through a memorandum account. Charges for the project will not reach customers' bills until all the costs of the project are thoroughly reviewed and the well is providing service.

"Water supply and conservation remain the biggest long-term challenge for the region, including Larkfield," Seidl said. "We believe it is appropriate to move forward with the Mark West Station Well in a way that doesn't affect our customers' rates until the project is developed and providing service."

Currently, the CPUC is reviewing statewide filings for cost of capital and general office expenses from California American Water. The CPUC also approved a new tiered rate structure for Larkfield that will reward residential users who conserve. Final approval of the tiered rates for Larkfield is pending and the rates are expected to take effect soon. If all of these filings are approved in their entirety, the bill for the average metered residential customer using about 11,220 gallons of water per month would increase 24 percent from $77.34 to $95.87 between current rates and 2010. This would equal an increase of approximately 61 cents per day. In 2011, rates for the average residential user will increase an additional 11 percent to $99.82.

California American Water is expecting a decision on the case by June 2010. The change in rates for California American Water customers will become effective only after thorough analysis and review of the final application by the CPUC, a process that takes approximately 20 months and includes opportunities for public input.

"The process for the California Public Utilities Commission to review and approve our request is an open and transparent process with many opportunities for customer feedback and input," Seidl said. "We will be out in the community speaking about the new tiered rate structure and the need for continued conservation as well as the investments and expenses we are asking the CPUC to approve and how they will benefit our customers."